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European crowdfunding for research and innovation: how to improve it?

Submitted by kjakimowicz on Wed, 2016-08-03 18:31.

At 21%, Europe is the world’s largest market for alternative finance behind Northern America and Asia. European crowdfunding platforms raised €3 billion in 2014, while going much stronger in 2015 with €7 billion in 2015. Crowdfunding provides funding for a variety of projects: from artistic endeavours to philanthropic causes. But what is the potential of crowdfunding for research and innovation?

Open Evidence, Politecnico di Milano, Ernst & Young and European Crowdfunding Network are currently finalising a study on CF for research and innovation in Europe, for the European Commission, and here are couple of sneak peeks into preliminary findings.

Which countries crowdfund the most?

While we see encouraging growth of Europe’s crowdfunding market, it is discouraging to see that UK platforms account for ¾ of the European market, having left far behind France, Germany, Sweden and Spain. Only the Netherlands, Germany, Italy, France, Spain and Sweden account for more than 3% according to platforms’ data analysis, conducted under the remit of the study.

Universities could do better

Based on an analysis of over 260,000 projects (including around 67 000 across Europe), it is evident that universities and other higher education institutions are not taking a full advantage of CF for research and innovation. Only 2% of all EU projects funded via CF were led by universities, while individuals represent 81% of beneficiaries of such projects.

What makes a difference for an investor?

What do you think is the most important factor for an investor when making a decision on which R&I project to invest in via CF or alternative finance? According to interviews done throughout the study, size and scope of the project and R&I stage are the most important factors, while coherence with firm life-cycle follow suit.

Why isn’t there more pan-European crowdfunding cooperation?

When asked what are the main impeding factors for cross-border CF cooperation in the EU, interviewees identified the lack of an EU regulatory framework on CF and the fragmentation in national regulatory regimes as the main problems. Do you agree with the statement below?

“Impediments are small in donation and reward based CF models, while cross-borders operations in lending-based and equity-based CF are more complicated due to the different regulatory regimes in place at the national level”.

The full study will be released January 2017, until then we will release some of the findings, so stay tuned! But do tell us, what is your experience with CF in Europe? Ever used it? Does it need improvement and how would you make it better?

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cannot be held responsible for any use which may be made of the data,
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